GQ Guide to Blockchain: Everything you need to know

There's a lot more to Blockchain than just Bitcoin and Ethereum (a lot more)

It has been called the future of trade or even the new ‘Internet’, but apart from the fact that it’s the technology that supports Bitcoin and Ethereum, not many know what Blockchain exactly is, and even less, what it means for the future. Notwithstanding the fact that it has dominated the discourse among the inner circle of the tech world, any excitement about Blockchain invariably has been drowned out by the ongoing gold rush for Bitcoin and Ethereum – its two most popular products. You’ve already probably wondered what it exactly is and since you’ll only be hearing it being talked about more and more in the near future, we decided to put together an explainer about everything you need to know about Blockchain.

What is Blockchain?

In the simplest of terms, Blockchain is a database. To borrow the words of one expert who explained it thus: Blockchain is to the current systems of storing secure information what Google Docs is to Microsoft Word. If you’re scratching your head about how exactly the two are analogous – they’re actually more similar than you think. As we already said, Blockchain is like any other database on the Internet – it’s got ‘Blocks’ of information stored in a ‘Chain’. But it has a pretty simple twist. Unlike a normal database, say that of a bank, where all the data is stored centrally in one location (physical or virtual) and no one outside has access to it, Blockchain distributes access to everyone involved, no matter where they are in the world. By doing this, it makes sure that no single person can change, delete or add to it, without the knowledge of everyone else. They do this by distributing and storing the database in networks around the world – meaning no one can hack it or tamper with it, not without the whole world watching.

Who created Blockchain?

No one knows for sure. But the person (or the group of people) who first came up with this ingenious idea back in 2008 went by the pseudonym ‘Satoshi Nakamoto’. To this day, no one knows who this person or group of people really is. But what we do know is Satoshi Nakamoto roughly own(s) some million units of Bitcoin as of May 2017, making them worth $2.7 billion.

What does Blockchain mean for the future?

To be sure, while it is a new and novel technology, Blockchain cannot be credited for giving rise to digital currency. In fact, the concept of digital currency predates the creation of the first Blockchain. However, what Blockchain can be credited for is solving what was thought to be a fatal flaw in the concept of digital currency – a problem known as ‘Double Spending’. It’s a problem where a single unit/token of digital currency is used multiple times, leading to duplication. But thanks to its shared nature, this becomes impossible in Blockchain.

As for what implications this technology will have on the future, Blockchain’s already given rise to an entire industry of enabled services that, according to some experts, has been valued at a whopping $100 billion. Apart from its obvious application in digital transactions, Blockchain is already proving to be a foundational technology in supply chain and asset management, where it provides a new level of openness and transparency. But perhaps the most disruptive use of Blockchain could come in a field that is a lot more closer to us: social media. According to experts, with Blockchain, it is possible to envision a global network where storage of data, contracts, transactions and even processes could be completely decentralised.

Since all data in Blockchain is stored in digital code known as ‘blocks’ and because each block comes with its own time and digital stamp and is linked to the preceding block, it becomes that much easier to both validate the data or protect it. This effectively means living in a social order which renders banks, organisations and even lawyers obsolete. In other words Blockchain could well herald a new world order.

If you’re thinking all this talk about Blockchain is just pipe dreams and nothing more, just ask the government in Mauritius, that already has plans to partner with an Ethereum-based startup and are planning to become the world’s first Blockchain-based economy in just few years’ time.